News

Morton denies Children's Theatre conflict

Councilman Jack Morton said Wednesday he does not have a conflict of interest regarding the proposed Children's Theatre audit. Palo Alto Weekly file photo.

Councilman Jack Morton said Wednesday he does not have a conflict of interest regarding the proposed Children's Theatre audit.

"The city attorney did not tell me I have a conflict. I'm not connected," Morton said.

City Attorney Gary Baum said he could not disclose his advice to council members due to attorney-client privilege.

"I certainly went over the issues with (Morton)," Baum said Wednesday.

Morton has been the accountant for the non-profit Friends of the Palo Alto Children's Theatre since the 1980s. In the last year, he has volunteered his services, charging the non-profit nothing, although in the past he has sometimes charged a discounted rate, Morton said Thursday.

A sub-section of Sgt. Michael Yore's May 15 criminal investigation report focuses on Morton, listing five questions Yore would like to ask Morton. Morton has also been one of the most outspoken critics of the police investigation, calling it a "sorry mess" this week.

The council decided Monday to work with police auditor Michael Gennaco, of the Los Angeles County Office of Independent Review, to determine the scope of an audit examining the 11-month investigation into potential embezzlement at the city-run theater, which ended May 15. No one will be charged with a crime.

Morton said he has no direct relationship with the theater.

"The Police Department isn't investigating the Friends," Morton said.

In addition, the council doesn't intend to investigate the Friends, he said.

Morton said he didn't know what he would tell someone who believes he has a conflict.

"I guess everybody's entitled to their opinion. There's no legal reason for there to be a conflict," Morton said.

Morton said he was surprised to see his name in the report and believes that makes him a possible witness, but doesn't create a conflict.

"(Yore's) questions seem to be almost insane. They were really off-the-wall," Morton said.

State and local ordinances on political conflicts of interest focus on financial relationships.

It must be "reasonably foreseeable that the governmental decision will have a material financial effect on each economic interest," according to Fair Political Practices Commission regulations.

The city's Council Protocols are broader. It is a code of conduct, enforced informally.

"In order to assure their independence and impartiality on behalf of the common good, members shall not use their official positions to influence decisions in which they have a material financial interest or where they have an organizational responsibility or personal relationship, which may give the appearance of a conflict of interest."

Mayor Larry Klein also says he doesn't have a conflict regarding the Children's Theatre audit. He is being paid as the attorney for Assistant Director Michael Litfin's estate. Klein is also mentioned in the 120-page Yore report because he released traveler's checks found in Litfin's condo to the police. The proceeds from Litfin's estate will be donated to the Friends.

"The reason (I don't have a conflict) is very simple. Has Michael been accused of any crime? Answer: no. Does the estate have any financial stake in any of this? The answer is no," Klein said.

Several other council members said Morton could have a conflict and that Klein probably doesn't.

"I think it's a valid question for Jack given his official capacity with the Friends group," Councilman Pat Burt said.

If their roles were switched, Burt said he "would have to consider really hard whether it would be appropriate to participate."

Burt said he understands how passionately Morton feels about the investigations, feelings that would make it even harder to step away.

"I think it's important that the council be able to have credibility as trying to be as impartial and objective as possible," Burt said.

Vice Mayor Peter Drekmeier said each council member must determine whether he or she has a conflict.

"Legally (Morton and Klein) don't have a conflict. But they might on their own determine they had a conflict," Drekmeier said.

Councilman Sid Espinosa said he's been receiving inquiries from community members.

"I trust each of my colleagues will work with the city attorney whenever they are concerned that they might have a conflict of interest and the city attorney would speak up if he was ever concerned if one of the council members did have a conflict of interest," Espinosa said.

Espinosa said he had assumed that discussion had already occurred because the Children's Theatre case has been so prominent.

Councilman John Barton said he isn't ready to discuss his opinion.

"I have my own thoughts on this, but I need to talk to my colleagues."

Councilman Yiaway Yeh said he has no comment on the issue.

On page 117 of the police report, Yore lists five follow-up questions he has for Morton, related to the itemization of costume sales on the Friends' tax reports and the source of money in the "Director's Discretionary Fund."

Yore also wanted to know "why (Morton) did not report to the city that tens of thousands of dollars of city funds were being siphoned out of the city's general fund (from the costume sales and extra performances) and were being given to the Friends."

Also, "why (Morton) did not report to the city that fraudulent contracts (according to Assistant City attorney Don Larkin) arranged by Briggs and Litfin with the Friends were being used to embezzle money from the city."

Prediction:
Jack Morton will be forced to resign from the city council. He has already overstepped his bounds. It's just a matter of time before he will be forced out. The conflict of interest, whether real or perceived, is there.

Posted by William
a resident of Charleston Meadows
on Jun 11, 2008 at 4:59 pm

> "Legally (Morton and Klein) don't have a conflict.
> But they might on their own determine they had a
> conflict," Drekmeier said.

Besides being a contradictory statement, what does Peter Drekmeier know about the law? Gary Baum's comments to Klein and Morton have not been made public, and will not unless either of these two voluntarily reveal his words to them.

It's inconceivable to me that Morton doesn't recognize this as a perceived conflict of interest -- which is a conflict of interest. He's an obvious stakeholder since his proprietary firm audits the entity (Friends) that was part of the broader police investigation--even if no charges were filed. YOU DON'T NEED THE CITY ATTORNEY TO SPELL THIS OUT FOR YOU!

Morton's failure to understand this raises serious concerns about his lack of judgment and personal ethics, and further, undermines the public's confidence in the credibility and ethics of the city council as a whole.

Frankly, I wonder whether Morton has effectively managed to simultaneously breach ethic standards and conflict-of-interest guidelines as both a member of the Palo Alto City Council as well as a CPA governed by the rules of the California Board of Accountancy (Dept of Consumer Affairs).

Hey Palo Alto Online Staff - there's an interesting angle to research as part of your story. Here's link to California Board of Accountancy Web Link but perhaps a phone call to see what they think is worth your dime.

Posted by Mike
a resident of another community
on Jun 11, 2008 at 5:25 pm

"why (Morton) did not report to the city that fraudulent contracts (according to Assistant City attorney Don Larkin) arranged by Briggs and Litfin with the Friends were being used to embezzle money from the city."

Where did Sgt. Yore learn to form questions?

From Stephen Colbert?

Wow.

I have a dream question to ask as well.

Sergeant Yore, are you a really bad investigator or are you the world's worst investigator?

Posted by William
a resident of Charleston Meadows
on Jun 11, 2008 at 5:35 pm

> "The reason (I don't have a conflict) is very simple.
> Has Michael been accused of any crime? Answer: no. Does
> the estate have any financial stake in any of this?
> The answer is no," Klein said.

One of the unasked questions of this Police Report is: "why wasn't Michael Litfin investigated like the others were?"

A Mayor who was not the estate trustee of Litfin might well be asking this question. If Litfin were being investigated, that would probably make this a somewhat different situation for this Mayor/Lawyer.

Klein and Morton should apply the Voir dire test. If they were representing someone in court proceedings would they accept jurors (who had connections similar to the ones they have with PACT/FCT) with that kind of bias ?

"Council members Sid Espinosa, Yoriko Kishimoto, Greg Schmid and John Barton seemed uncomfortable with Morton's grandstanding."
But they did and said nothing. Year after year--new council members, old council members we always seem to end up with spineless councils that are unable and/or unwilling to stand up to the vocal minority. This case is even worse because their fellow council members are engaged in shameless and unethical behavior.

It is clear that the supporters of "Saint" Pat, led by Morton and Klein, are focusing their efforts on the direction of vilifying the police and turning them into the bad guys in this whole episode. Forget about Briggs' money laundering and 12-13 bank accounts and double reimbursements. The police are evil and that is their strategy.

As Ms Fisher puts it so well at the end of her piece:

"I suspect, however, that unless the auditor comes back with a scathing condemnation of the police department, the theater community will insist on auditing the auditor."

On a contrasting note yesterday's print edition of the PA Weekly had a small editorial regarding the PACT investigation in which the editor chastised all those that are drawing conclusions about the affair. I am wondering if the writer is chastising everyone, including their staff, the Friends of PACT and council members Klein and Morton or just those people that are critical of "saint" Briggs. Unfortunately they did not see fit to put it into their online edition--maybe they realized how ridiculous the editorial was. Since according to the Weekly having opinions are wrong.

Finally there was an excellent letter in yesterday's weekly also about this whole affair from a local resident:

"Palo Alto drama

Editor,

Act 1:

A whole bunch of Palo Alto city money grows legs and goes missing. It was last seen near the corner of Middlefield and Embarcadero roads.

Act 2:

Mass confusion. Nobody knows exactly how much is missing because the city, contrary to its own written policy, doesn't require expense reports and receipts for reimbursed employee expenditures. It gives out advances for future expenditures without requiring that previous advances be cleared. Furthermore, after six years the records of advances are destroyed. All one has to do is request an advance, wait six years and then keep the money.

The city auditor considers the amounts involved too trivial to look into. Skeptical onlookers note that two council members and one state senator had close personal ties to the people involved.

Finally the police department, seeing strong evidence of embezzlement, conducts an investigation. A detailed report is prepared which shows evidence of money laundering (multiple personal bank accounts, unused traveler's checks). But due to the destruction of records, prosecution is not possible.

Act 3:

This being Palo Alto, everybody gets his or her say. One City Council member, believing himself to be a papal envoy, elevates a suspect to sainthood. Monday nights are taken up with three minute soliloquies. Outrage reigns. Who is the villain in all this? The police!

An amazing place, Palo Alto.

David Lieberman

Kingsley Avenue

Palo Alto"

In closing Klein and Morton should resign from the council ASAP. They actions are disgraceful and betray a lack of ethics.

Posted by Mike
a resident of another community
on Jun 12, 2008 at 6:39 am

Mike,

It should be of concern to any law abiding citizen when a police officer chooses to paintbrush or profile a suspect when his job is merely to investigate.

It's one thing for anonymous posters like Narnia to draw an unsubstantiated conclusion and then to try to work backwards to prove the point (in support of a clear agenda where they feel that the end justifies the means), but wholly another thing for a police officer to do the same.

Yore categorically defined them as embezzlers but here we now are with
ALL CRIMINAL CHARGES DROPPED.

Clearly, it is now apparent that the case was too complex for Yore to investigatively master.

Back in January, I cornered someone familiar with the theatre and asked them what was REALLY going on. They told me that there had been some general sloppiness but that it was going to be wildly blown out of proportion by people having nothing to do with the theatre.

Posted by William
a resident of Charleston Meadows
on Jun 12, 2008 at 7:34 am

> Clearly, it is now apparent that the case was too complex
> for Yore to investigatively master.

This case is not complex at all. It might have been somewhat difficult to investigate in a short period of time, given the failure of all concerned to keep adequate records--and due to the death of Michael Litfin.

The question is: "how does a police investigator PROVE embezzlement"?

Complicated cases, like the Michael Milken matter of some years back, were unraveled--and that one was very complex.

> ALL CRIMINAL CHARGES DROPPED.

No criminal charges were ever filed--so they could not have been dropped. The criminal investigation was terminated due to the DA's claim that there was insufficient evidence available to secure a conviction in a Santa Clara Court.

Posted by fireman
a resident of another community
on Jun 12, 2008 at 9:56 am

Gary Baum,Mr Confict of interest himself. Lets not write anything down Baum? Is telling Mr Morton that there is no conflict of interest? Wow that means a whole bunch. The City that can not seem to figure out what the law means or how it should be followed. Is telling everyone that nothing is wrong, everything is alright. Yea sure looks that way.

Funny with all the law suits and settlements that this City pays out, no one have ever seen or heard the whole story about anything in Palo Alto.

Mr Yore will be promoted in the Future. Just like members of the inhuman Resource Department. Do the City's dirty work. get brain washed into thinking The City of Palo Alto can do no wrong, attack and harass anyone who thinks different. And the pot of gold will open for you to fill your pockets.

Jacko, Why stop with Morton. He is only part of the group that has been let loose on the citizens and Employee's. It is time to do something about what is going on. So Jacko next step?

A new tag line. Palo Alto, a conflict of interest. Where all the rats are jumping ship.

mike says
"Back in January, I cornered someone familiar with the theatre and asked them what was REALLY going on. They told me that there had been some general sloppiness but that it was going to be wildly blown out of proportion by people having nothing to do with the theatre.

How right they were"

That sloppiness cost the city plenty of money, namely over 22,00.00 that Briggs decided to donate to the FCT. WHO exactly allowed this?

If that's all right by you, please send me a check for that amount....

Posted by fireman
a resident of another community
on Jun 12, 2008 at 10:44 am

Narnia.. 22,000.00 is nothing on the waste scale. Why does that amount interest you and not the 500,000.00 $ plus wasted on the Paramedic Transport Engines . That the City does not have for a program that does not exist? that had been worked on for many years. Would you rather be getting that check?

Fireman,
One thing is for you to have opinions about the city's emergency services. another is injecting them in a forum about "Morton denies Children's Theatre conflict"

If you want to start a thread for the emergency services or how the city wastes money or any other matters do so , but you are speaking on this forum out of turn and outside its scope. So, I really don't care right now about the emergency services. I am focusing on the PACT and related matters. Just in the same way that if you are fighting a fire you cannot concentrate at the same time on the accident down the street.

Posted by eric
a resident of Mountain View
on Jun 12, 2008 at 12:27 pm

Jack Morton provides a very valuable service to the community by performing low cost audits to non profit organizations. He is a straight shooter and an honest man. This ignorance-fueled vitriol against him is disgusting.

Posted by Bye Bye Briggs
a resident of Another Palo Alto neighborhood
on Jun 12, 2008 at 12:33 pm

Jack Morton initiated this "vitriol" by continuously attacking the investigation and the PAPD. Whether or not he has a conflict of interest is open to interpretation (I think he does), but the simple appearance of conflict of interest should be avoided by public officials.
It clearly looks to me like Morton and Klein are in league with the Friends of PACT to protect the PACT staff at all costs by denigrating the investigators and the investigation.
As far as I am concerned, he is seriously ethically challenged and needs to recuse himself for further discussions on this issue. Besides his shameful behavior it is quite clear that the rest of the city council should be ashamed of themselves for not standing up to Morton and Klein.
By the way Eric, read the Patty Fisher column I linked to above and also today's letter in the DAily Post from Richard Placone.

Posted by Theater Kid Since '67
a resident of another community
on Jun 12, 2008 at 1:52 pm

And as of now, not a single cent has been paid back by any employee. 126 instances of submitting double invoices is NOT a mistake nor is it sloppiness. It is THEFT that is simply beyond the statute of limitations.

Posted by anonymous
a resident of Duveneck/St. Francis
on Jun 12, 2008 at 2:30 pm

Once again, this situation can be termed a "mess" and it is beyond me why as a Palo Alto taxpayer, I should be asked to support PACT. #1 is to disengage PACT from the city of Palo Alto and taxpayer monies. #2 is for Palo Alto voters to seriously evaluate the behavior and actions of Mr. Klein and Mr. Morton - I, for one, am concerned and disappointed.
I agree, Old Boy Network rules here! And it shouldn't.

Posted by fireman
a resident of another community
on Jun 12, 2008 at 4:31 pm

Narnia, Did not like that question... So you just answer around it.. Morton is part of the group that runs the city. It is all City funds we are talking about. If a person has questionable action. Then maybe looking at his other actions and his record might be helpful.

Idea if the City was going to give you the $500,000.00 instead ?? Might you be able to multitask? I even hear some people can walk and blow bubbles. At the same time no less CRAZY stuff??

Oh and you are wrong.. I know you will not think so. Yes if I am fighting a fire one of my fellow firefighters better be thinking about the accident down the street. For so many year we have been short Paramedic ambulances that I did have to worry about the other call. Never wanted a child to choke to death while I was doing something that made no sense at all because the City needs the money and they do not care who they get it from or how they get it.

Your are Funny. Do not give you facts or the truth. it just gets in the way of what you are trying to SELL...

Posted by carl
a resident of College Terrace
on Jun 12, 2008 at 9:06 pm

I couldn't open the web link. Could BB Briggs please repost it?

Morton does have a conflict of interest no matter how he twists and squirms. John Barton recused himself without being prompted when a possible conflict of interest arose in dealing with Stanford. When there is doubt, do the ethical thing. Thank you Mr. Barton.

The question that never seems to be discussed is why did Mrs. Briggs have 12 bank accounts?

Posted by William
a resident of Charleston Meadows
on Jun 13, 2008 at 8:51 am

> "It might have been somewhat difficult to investigate in a
> short period of time, given the failure of all concerned to
> keep adequate records--and due to the death of Michael Litfin."

How long does it take to determine the truth?

How long has it taken to find an AIDs vaccine?
How long has it taken to determine if there is life in the universe?
How long does it take to teach all of America's children to read at a proficient (or above) level?

Time is not the issue here. Whether the truth has been revealed is the issue.

Posted by bye bye briggs
a resident of Another Palo Alto neighborhood
on Jun 13, 2008 at 9:56 am

Outside observer--Thanks. The citation you gave does not mention different maturation dates for her time deposits. Do you have that information or were you just exptrapolating?
Looks to me like she has opened all of these accounts and CDs to help launder the money she was skimming from the city.
By the way what is the "agenda" you talk about? Is it to get at the truth and cut through the bullcrap and barriers being thrown in the way by Morton, klein and Friends of PACT??

Posted by fireman
a resident of another community
on Jun 13, 2008 at 10:10 am

You would think the TRUTH would be simple to find? Well maybe what they need or want the truth to be, is not so simple to find. It does not exist. It is no friend of theirs so maybe they will just let it sit at the train station until it gets hit by a train and killed or Gets on a train heading out of town FAST?
The truth is not made. It is told/found by truthful people. You will never see it in the CITY of Palo Alto. Everyone seems to have there own version of it. Funny how they all are so different?
Like criminals , separate them and you get many different stories, with all the fingers pointing in different directions?

Posted by Outside Observer
a resident of another community
on Jun 13, 2008 at 6:16 pm

BBB,

"Outside observer--Thanks. The citation you gave does not mention different maturation dates for her time deposits. Do you have that information or were you just exptrapolating?"

I'm extrapolating, as that is common practice for time deposit accounts. Having multiple time deposit accounts mature on the same day is illogical, as, depending on the total amount deposited, you may get a better rate on a larger single deposit.

This is the conclusion I've drawn in regards to the bank accounts, based on incomplete information, just as you have drawn this conclusion, again based on incomplete information:

"Looks to me like she has opened all of these accounts and CDs to help launder the money she was skimming from the city."

Now, as for "agenda", the information in the police report about "multiple" bank accounts is an excellent example of Yore's agenda, and, in my opinion, the partial information in the police report is an example of lying by omission.

William started me going on this when he asked about the 12 bank accounts. You've come to a conclusion they are used to launder money, yet there is no hard evidence of that in the police report, indeed, the single comment about the nature of the accounts on page 00042, line 20 would indicate Briggs does what most others do when saving money with time deposits.

Yore has all of Briggs bank records. He gives minute detail where that detail supports his theories, yet there is no detail in the report to support Yore's implication that simply having 12 bank accounts is an indication of embezzlement.

But you've come to that conclusion, as have many many others.

Sorry to have to say this, but I believe you, and the others who would condemn Briggs based on having multiple bank accounts have been "played".

In my opinion, this one small example of the multiple bank accounts is a theme repeated throughout the police report of (jumped to conclusions) supported only by selective evidence, while a logical look at all the evidence available or potentially available shows intentional "cherry picking".

By their actions, it would seems that the County DA would agree with my opinion.

On page 00013, line 37, Yore says:

"Briggs' and Litfin's pattern of conduct is to lie by omitting material facts and to provide false and/or misleading data to decision-makers they interact with"

Replace "Briggs' and Litfin's" with "Yore's and Johnson's", then I believe you've got something much closer to the truth.

Posted by carl
a resident of College Terrace
on Jun 14, 2008 at 9:52 pm

Outside Observer. Thank you for responding and keeping the tone of our exchanges civil. It restores my waning faith.

I have a number of CD's, IRA's and time sensitive accounts. They are all kept in one account and detailed separately under specific identifiers. So I get one statement instead of several separate ones. I'll have to ask my banker if there is an advantage to open separate accounts for each one. Sounds inefficient to me.

Perhaps we should ask Mrs. Briggs why she has so many accounts instead of speculating? I would hope that would clarify this question.

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